dwarikesh sugar industries ltd share price Directors report

Your Directors are pleased to present their 29^th (Twenty Ninth) Annual Report along with the Audited Financial Statements for the year ended on March 31, 2023.

FINANCIAL RESULTS

(H in Lakhs)

Particulars	Year Ended 31.03.2023	Year Ended 31.03.2022
Gross profit before depreciation, interest & tax	22,856.96	29,396.17
Less: Depreciation	5,021.64	4,362.92
Finance Costs	2,584.74	3,165.77
Profit / (Loss) before tax and exceptional items	15,250.58	21,867.48
Profit / (Loss) before tax	15,250.58	21,867.48
Tax expenses	4,769.52	6,345.93
Profit /(Loss) after tax	10,481.06	15,521.55
Total comprehensive income / (loss)	10,416.71	15,557.41

YEAR IN RETROSPECT

Operations: Distinguishing features of the crushing operations in your Company are given in the following paragraphs: Metrics of sugarcane crushed, sugar produced and recovery achieved during the year is given hereunder: Sugarcane crushed and sugar produced across three units (FY 2022-23)

Particulars	1 2022-23 1	2021-22	Change
Crushing (lakh quintals)	382.13	373.92	2.20%
Recovery % (Gross - adjusted)	11.83	12.09	-2.15%
Recovery % (Net)	8.63	10.59	-18.51%
Production (lakh quintals)	32.98	39.60	-16.72%

Sugarcane crushed and sugar produced during season (FY 2022-23)

Particulars	1 2022-23 1	2021-22
Crushing (lakh quintals)	302.71	298.77
Recovery % (Gross - adjusted)	11.62	11.85
Recovery % (Net)	8.00	10.31
Production (lakh quintals)	24.02	30.58

For ongoing crushing season 2021-22 (up to 31^st March, 2023) vis-a-vis up to same date in SS 2021-22.

HIGHLIGHTS FY 2022-23

- Sugarcane crushing increased marginally by 2.20% y-o-y.

- Net Recovery stood at 8.63% vis-a-vis net recovery of 10.59% during FY 2021-22. The same is lower by 18.51%. During SS 202223 sugarcane juice was for the first time directly used for making ethanol at both DN & DD Distillery units. 60.69 lakh quintals out of total cane crushed was thus diverted for making ethanol. The net recovery was achieved after taking into account the diversion of sugarcane juice / syrup at DN & DD plants and also on account of generation of B heavy molasses at all plants. Gross - adjusted recovery is 11.83% as compared to 12.09% in FY 2021-22.

- Sugar production is also lower on account of aforesaid diversion of sugarcane juice and on account of generation of B heavy molasses across all units. Lower sugar production is also attributable to lower gross - adjusted recovery. During FY 2022-23

sugar production of 12.23 lakh quintals was sacrificed on account of diversion of sugarcane juice for ethanol and on account of generation of B heavy molasses. This was as against sugar sacrifice of 5.61 lakh quintals on account of generation of B heavy molasses during FY 2021-22.

- Lower gross - adjusted recovery is on account of inclement weather conditions, excessive late rainfall in the month of October, 2022 resulting in water logging in cane fields over prolonged period and devastation caused by red rot in the command area of Dwarikesh Dham unit. Unfavorable weather conditions persisted throughout the duration of the season hindering optimal recovery.

- Notwithstanding the fall in recovery during FY 2022-23, recovery clocked by your Company was yet among the highest in North India.

- Diversion of sugarcane juice for ethanol and generation of B heavy molasses will result in broad-basing & transformation of the production metrics with increased focus on production of ethanol and moderation of sugar production. B heavy molasses generated at DN & DD unit is being stored for use in their respective distilleries during off-season, whereas B heavy molasses generated at DP unit will cater to the requirements of B heavy molasses at the distilleries of DN & DD units after fulfilling obligation to supply B heavy molasses for country liquor purposes.

Performance of cogeneration division: Metrics of power sold:

Unit	FY 2022-23		FY 2021-22
	Power sold in lakhs Units	Amount (H in Lakhs)	Power sold in lakhs Units	Amount (H in Lakhs)
DN	258.94	844	284.19	892
DP	578.60	1,918	585.16	1,864
DD	632.50	2,099	725.62	2,301
Total	1,470.04	4,861	1,594.97	5,057

Performance of distillery: During the financial year, 849.61 lakh liters of industrial alcohol (previous FY 553.71 lakh liters) was produced and 841.75 lakh liters (previous year 557.28 lakh liters) of industrial alcohol was sold. A revenue of H533.50 crores (previous year H326.21 crores) was generated which included revenue of H2.17 crores (previous year H1.62 crores) from sale of byproducts.

SUGAR INDUSTRY OVERVIEW

Global sugar industry scenario

- According to the March, 23 report of S&P Global ‘Commodity insights, the projected surplus for SS 2022-23 was expected to moderate at less than one million tons, considerably lower than the erstwhile forecast of 3.77 million tons; This decline was largely due to cuts in sugar production from Asian countries. According to their latest report production estimate is further trimmed and S&P now estimates a virtually balanced position.

- In case of India & Thailand, decline in the crushing rate has been faster than usual. Drop in the output expectations from India & Thailand creates prospective uncertainties. There is also 50% probability of El-Nino event in the second half of 2023 which increases the chances of drier weather in Asia and wetter weather in Brazil. However, Season 2023-24 is expected to be a season of bumper sugar production for Central South Brazil.

- In CS Brazil, despite large crop expected for SS 202324 sugar supplies remains muted across the short term. In case of North - Northeast Brazil downside production

risks linger. In Thailand cane estimates for SS 2022-23 and SS 2023-24 are on lower side. In EU production cut on account of lower planted area is forecast. While China could continue to be a dominant sugar importer, its imports could prove unpredictable.

- Global raw sugar prices have been at an all-time high in the last 6 years. Tightened supplies from Brazil attributable to logistic & port related problems and frequent downward revision in production estimates form India have accentuated the price rise. The uncertainty of Government of India allowing further exports has also propelled the price rise. India has emerged as key sugar exporting geography as it played a pivotal role in the export trade in the world. India is seen as a big influencer of Global sugar price. India exported a record of 11.2 million tons of sugar in SS 2021-22. Indian sugar has been largely exported to Indonesia, Bangladesh, Malaysia, Middle east, China among other countries.

- Global sugar prices have been on upward spiral for large parts of the year. Presently NY May 23 future price for raw sugar is quoted in excess of 23 cents per pound. Higher energy prices have also lent support to international sugar prices.

- The ongoing war between Russia & Ukraine has also created opportunities for export of white sugar from India. White sugar prices have also moved in tandem with raw sugar prices and are at their 6 years highest. Indian sugar industry and ports have risen to the occasion and have completed their export obligations with consummate ease.

The Indian sugar industry - Consolidation

- Production figure of SS 2021-22 is 35.8 million tones after accounting for sugar sacrifice in favor of ethanol of 3.2 million tons: when factored back India produced nearly 39 million tons. Highest ever sugar exports - During the previous sugar season, India reported its highest sugar exports of 11.2 million tons, reinforcing the countrys position as a dominant global player. This export achievement was remarkable considering that they were not supported through subsidies / financial assistance by the Central Government. All logistic challenges at the ports were overcome seamlessly.

- As per the first estimate drawn by ISMA, it was expected that during SS 2022-23, India will produce 36.5 million tons of sugar after considering sugar sacrifice of 4.5 million tons, taking the gross sugar production to nearly 41 million tons. However, as the season has advanced, with news coming in of declining yield & recovery from the States of Maharashtra & Karnataka, ISMA revised its production estimate to 34 million tons of sugar while maintaining the sugar sacrifice number at 4.5 million tons.

- However, Trade bodies and Government of India have further announced a downward revision in production estimate and have now estimated the production at 33.6 million tons of sugar. Some independent trade houses believe that the production may in fact settle at less than 33 million tons. As per the latest update, ISMA trims sugar production estimate to 32.8 million tons from earlier 34 million tons.

- With the sharp reduction in tail end crush in Maharashtra & Karnataka, production estimate in Maharashtra is lowered to less than 11 million tons and in Karnataka lowered to less than 5.6 million tons. Crushing operations of many mills in Maharashtra & Karnataka have concluded even before 31^st March, 2023. Lower yields owing to unseasonal rainfall has resulted in lesser availability of sugarcane in these two states. Sugar recoveries in Uttar Pradesh proved lower, offsetting the gains in cane crush.

- The Government announced first tranche of export of 6 million tons under MAEQ mechanism. Nearly 5 million tons of sugar has already been exported. Most of the sugar mills in UP have traded deals with mills in Maharashtra, swapping their export quotas with domestic quotas.

- The Government has in the meantime recalibrated its opening stock number for SS 2022-23 at 7 million tons. As per Government of India, sugar availability for domestic consumption & exports is thus estimated at 40.6 million tons. Considering sugar consumption of 27.5 million tons & export of 6 million tons, the closing sugar inventory is now being estimated at more than 7 million tons, which translates to more than 3 months of domestic consumption.

- There is thus clearly scope for announcing at least one more million ton of sugar export. However, with the production estimates being in a state of flux, the Government may wait for clarity before announcing next tranche of exports.

However, the delay in announcement of export will limit the ability of Indian sugar mills to produce & export raw sugar.

- During ESY 2021-22 India creditably achieved ethanol blending of 10%. During ESY 2022-23, 12% blending is targeted. Already blending up to 20% is approved by the Government. The proportion of ethanol derived directly from sugarcane juice is expected to increase in ESY 202223. India is on course to achieve 20% blending by 1 ^st April 2025. Improved blending will result in moderating of sugar production, improvement in the ability of sugar mills to remunerate farmers on time, rationalizing the import tableau & widening the carbon footprint.

- Increased blending of ethanol is possible if more & more sugar companies ramp up their distillery capacities and start using cane juice / syrup as feedstock for making ethanol. Ethanol quantity presently offered using cane juice / syrup as feedstock is lesser than quantity of ethanol offered wherein B heavy molasses is used as feedstock.

- In order to encourage sugar mills to use cane juice / syrup as feedstock the rates presently announced by the Government needs to improved. More sacrifice of sugar will happen if and only if more sugar mills use cane juice / syrup as feedstock. Industry has been appealing for higher prices for ethanol made from cane juice / syrup directly and it is expected that Government will take an early call on the same.

- An area of concern has been the lower sugar prices in the domestic market. It is intriguing that the sugar prices have remained flattish throughout FY 2022-23 and have been range bound between H3,400 and H3,500 per quintal. This is in spite of projected lower closing inventory. Higher international prices have also not found resonance in domestic prices.

- However, there is a possibility that the premature closure of Maharashtra and Karnataka mills could revive domestic realisations (as could an El Nino likelihood in some global pockets in the second half of 2023).

- Under the ethanol blending program in the country, against requirement 600 crore liters OMC have till 31^st March, 2023 issued LOIs of 502 crore liters and contracts for 499 crore liters have been inked for ESY 2022-23 (December - October). Blending of more than 11.56% has been achieved. State of Uttar Pradesh has been in the forefront in signing ethanol contracts. However, out of 502 crore liters, ethanol produced from sugarcane juice/syrup as feedstock was only 142 crore liters or 28% of the total LOIs issued. There is a growing recognition that for the EBP program to be resoundingly successful, more procurement contracts will need be signed for cane juice / syrup-based ethanol.

- There are no two opinions about the success of the Ethanol Blending Program (EBP). Cash flows of sugar companies have improved. In the sugar season of 2021-22, the quantum of sugar production ‘sacrificed in favor of ethanol was 3.2 million tons while in SS 2022-23 this is expected to rise to more than 4 million tons. In SS 2023-24, a sugar ‘sacrifice of more than 6 million tons could reduce the gap between sugar production and consumption; the surplus sugar then available could be remuneratively exported.

- The government plans to introduce flex fuel vehicles, which can accommodate a higher percentage of ethanol and can even be operated completely on ethanol, a step towards helping the country achieve the 20% blending target.

- The EBP has showcased the Indian governments foresight in addressing longstanding sugar industry challenges. A cash-starved sector that suffered cane arrear delays now has healthy cash flows, making it possible to remunerate farmers punctually and invest in additional distillery capacity. A growing sugar ‘sacrifice is expected to moderate sugar inventory and strengthen realizations, strengthening a virtuous cycle of additional cane planting and mill capacity utilization. The confidence instilled by the ethanol blending program is noteworthy. Sugar inventory across the country stands tapered at reasonable levels. Though there are problems such as lower sugar prices among others, sugar industry doesnt now face insurmountable challenges. However, sickness in the industry is not completely eradicated. Some States do face problems of inadequate cane availability and there are still number of sugar mills operating at sub-optimal capacity.

- Sugar industry across the Globe is regulated and India is no exception. Central Government continues to regulate the industry.

Central Government continues to administer minimum selling price of sugar which is fixed at H3,100 per quintal though the industry has been seeking upward revision.

Central Government also operates the monthly release mechanism so as to ensure adequate & affordable sugar availability in the open market.

Central Government announces timely sugar export quotas to enhance sectorial liquidity and ensure better domestic realizations. During the SS 2022-23 the Government has announced maximum allowable export quota (MAEQ) of 6 million tons which has been apportioned across all sugar mills in the country. This was done to ensure a healthy domestic sugar balance between supply and demand, while addressing export needs. The Government dispensed with the export subsidy as international sugar prices remained attractive.

Central Government also determines the annual Fixed & Remunerative price (F&RP). The same is the minimum price which sugar mills must pay for the sugarcane procured by them. Some States went one step further and announce a State Administered Price (SAP) that is higher than F&RP

Ethanol procurement price for Ethanol Season Year 202223 (December to October) is fixed at H49.41 per liter for ethanol made from C-Heavy molasses (increase of H2.75 per liter over the price of previous period), H60.73 per liter for ethanol made from B-Heavy molasses (increase of H1.65 per liter over the price of previous period) and H65.61 per liter for ethanol produced directly from sugarcane juice (increase of H2.16 per liter over the price of previous period). The Government had during ESY 2021-22 also announced ‘relief price to incentivize sugar mills to supply more ethanol during the lean months.

The Uttar Pradesh Sugar Industry - Transformation

- During SS 2022-23 UP State is expected to produce around 10 million tons of sugar, which is in line with the previous Sugar season.

- Gains in crush on account of higher cane area have been neutralized by lower yield, lower recovery and higher diversion of sugarcane for producing ethanol.

- The commencement of season 2022-23 was delayed by over 10 days on account of incessant & unseasonal rainfall during October which has resulted in waterlogging of cane fields. Antagonistic climate conditions and the menace of red-rot, scuttled and dented the prospect of improved yields and better recovery.

- The State Government announced no change in SAP for SS 2022-23 which remained H350 per quintal (delivered at factory gate) for early variety, which constitutes nearly 90% of the total supply.

- The season of 2022-23 has witnessed aggressive participation of sugar mills in Uttar Pradesh in ethanol blending programs. Many a sugar mills are using cane juice / syrup directly for manufacture of ethanol.

- The enhanced financial stability of sugar mills in UP enabled these mills to moderate SS 2022-23 cane price arrears to around H7,500 crores from more than H10,000 crores around the same time in the previous year.

- Many sugar mills have altered their cane mix from the high yielding Co 0238 which was a win-win variety for both farmers and sugar mills. Since the said variety has now become prone to red rot epidemic, the same is now sought to be replaced by other equally good, early maturing & promising varieties.

- UP sugar mills have witnessed moderation of stock levels of sugar, owing to exports in the previous season and also on account of production of ethanol using B heavy molasses and sugarcane juice / syrup.

Dwarikesh - Financial Scorecard:

Particulars	2022-23		2021 -22
	(H lakh)	(%)	(H lakh)	(%)
Revenue from operations	2,10,296	100.00	1,97,871	100.00
EBITDA	22,857	10.87	29,396	14.86
EBDTA	20,272	9.64	26,230	13.26
EBT	15,251	7.25	21,867	11.05
EAT	10,481	4.98	15,522	7.84

- Revenue from operations during FY 2022-23 is up by 6.28% as compared to the revenue during 2021-22. Improvement in revenue growth is inferable to the increased releases under the monthly release mechanism administered by the Central Government & beneficial revenue mix with additional weightage of ethanol. It is worth mentioning that the share of revenue from distillery segment to the total net revenue is 25.37% as compared to 16.49% in the previous year. Distillery plant at DN unit worked at its rated capacity while the distillery plant at DD unit which was commissioned in June, 2022 also operated for a part of the year at its rated capacity.

? EBIDTA, during FY 2022-23 is H22,857 lakhs as compared to EBIDTA of H29,396 lakhs during previous FY, is 22.25% less. Lower EBIDTA as compared to previous FY is on account higher cost of goods sold without commensurate increase in their selling price. Higher cost of goods sold is a reflection of higher raw material cost as well as lower sugar recovery.

? EBDTA, during the year under review your Company earned EBDTA of H20,272 lakhs as compared to H26,230 lakhs earned in the previous FY.

? Earning before tax is at H15,251 lakhs when viewed in conjunction with that of the previous FY (H21,687 lakhs).

? Earnings after tax is at H10,481 lakhs, as compared to the earnings after tax of previous FY of H15,522 lakhs. Earnings after tax for the year is 32.47% less than earnings after tax of the previous year.

? Your Companys focus to rein in finance costs has been fruitful and the Company was able to compress finance costs.

Salient features:

- According to the latest estimate, crushing will be in line with that in the previous season with all our units expected to report a similar crushing. The Company initiated a program to change its varietal balance in the Dwarikesh Dham unit area. This unit encountered significant drop in the pol-in-cane during this season, indicative of lower sucrose and higher non-sugar content. Your Companys cane development is expected to reverse the trend.

- The Company has already exported 50,000 MTs of sugar under export policy of SS 2022-23. The raw sugar for export was produced at DN & DD units. The Company has swapped its balance export quota of 36,001 MTs with domestic quota releases of sugar mills in Maharashtra. The Company will benefit from additional releases from April, 2023 onwards.

- The Company utilized sugarcane juice directly for making ethanol at both its DN & DD distillery units. Of the total crushing capacity of 21,500 TCD, approximately 4,500 TCD was utilized for generating juice to be used in the manufacture of ethanol. B-Heavy molasses was generated in all three units, which will be used as ethanol feedstock during the off-season at both distilleries. The operations at both distilleries now stabilised; nearly 11 crore litres of ethanol is likely to be produced and sold to OMCs annually. With substantive sugar ‘sacrifice, the sales and revenue mix will transform.

- Rating agency ICRA, has upgraded the long-term rating of the Company to (ICRA)AA- (pronounced as AA minus) from [ICRA]A+ (pronounced ICRA A plus). This is a significant achievement and is recognition of judicious fiscal management of the Company. The outlook has been revised to ‘Stable from ‘positive. The Company has retained the highest rating of A1 + also from ICRA for its CP program of H 300 crores.

- Your Company continued to pay for sugarcane ahead of schedule. As on 31^st March, 2023, your Company had cleared payments for cane purchased up to 27^th March 2023.

- Your Companys distilleries (DN and DD units) were operating optimally even as the new DD distillery encountered teething challenges that were subsequently overcome. This resulted in a lower initial ethanol yield from feedstock.

- The fiscal in reckoning was a manifestation of higher cost of goods sold (a combination of higher cane cost & lower recovery) without commensurate increase in sugar realisations.

- Long term debt profile: Out of soft loan of H134.48 crores availed under SEFASU 2018, funded by the State Government, balance on 31/3/2023 is H33.62 crores and

out of distillery term loan availed of H116.88 crores for DN distillery unit, balance on the same date is H64.28 crores. Term loan of H185.60 crores sanctioned for 175 KLPD distillery plant at DD unit has been fully availed and no repayment during the financial year was made as the repayment is under moratorium. All term loans availed by the Company were mobilized at subsidized rate of interest.

- Sugar prices were inexplicably muted & subdued throughout the year and were flattish in the range of H3,400 per quintal to H3,500 per quintal.

- Your Company is constantly exploring possibilities of revenue optimization, cost rationalization and profit enhancement. Your Company is respected for competent management, translating into outperformance (evident in record recoveries).

- The SS 2022-23 was marked by lower recovery at the DD unit due to a widespread red-rot disease infestation in its command area. The DD unit comprises a vast command area; the unit holds potential for increased crushing and recovery. The Company intensified methodical ratoon management to moderate crop damage and sustain the healthy growth of Co-0238; it also took initiatives to replace this with new early maturing varieties like 15023, 14201 and 118. In command areas not marked by red rot, your Company sustained the health of Co 0238 and will introduce new varieties in a phased manner.

CANE & SUGAR POLICY

The main policies of the government in relation to the sugar industry during the year were:

a. The Fair & Remunerative Price (FRP) until SS 2017-18 was linked to a recovery of 9.50%. Effective SS 2018-19, FRP has been linked to a recovery of 10%. While the FRP for SS 2021-22 was H290 per quintal for SS 2022-23 the same stands increased to H305 per quintal again linked to a recovery of 10.25%.

b. Chronology of SMP/FRP announced by the Central Government on the basis of recovery is given herein under:

Season	SMP/F&RP H/ Quintal
2000-01(SMP)	59.50*
2001-02	62.05*
2002-03	64.50*
2002-03 (Revised)	69.50*
2003-04	73.00*
2004-05	74.50*
2005-06	79.50&
2006-07	80.25&
2007-08	81.18&
2008-09	81.18&
Season	SMP/F&RP H/ Quintal
2009-10 (SMP since replaced by F&RP)	129.84@
2010-11	139.12@
2011-12	145.00@
2012-13	170.00@
2013-14	210.00@
2014-15	220.00@
2015-16	230.00@
2016-17	230.00@
2017-18	255.00@
2018-19	275.00#
2019-20	275.00#
2020-21	285.00#
2021-22	290.00#
2022-23	305.00#

* Linked to recovery of 8.50%

& Linked to recovery of 9.00%

@ Linked to recovery of 9.50%

# Linked to recovery of 10.00%

c. All sugar mills in Uttar Pradesh are required to pay State Administered Price (SAP). For crushing season 2021-22 the State Government of Uttar Pradesh increased SAP by Rs. 25 per quintal across all varieties. For SS 2022-23 the Government retained the SAP of SS 2021-22. Early variety of sugarcane, which constitutes more than 90% of the sugarcane supplied by farmers, is now paid Rs. 350 per quintal for delivery at factory gate.

CHANGE IN NATURE OF BUSINESS

There is no change in nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

The Company commissioned 175 KLPD distillery at its Dwarikesh Dham Unit, Dist. Bareilly, Uttar Pradesh on 24^th June 2022. The distillery uses sugarcane juice / syrup as its principal feedstock during the cane crushing season and turns to B Heavy molasses route during the off season for continuous manufacture of ethanol. The implementation of project was on schedule. With the commissioning of this plant the revenue mix of the Company will undergo paradigm shift as the sugar production will moderate and ethanol production increase.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

No significant & material orders have been passed impacting the going concern status & Companys operations in future.

INTERNAL FINANCIAL CONTROLS

Your Company has in place adequate internal financial controls commensurate with its size, scale and operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable or significant deficiencies, no material weakness in the design or operation of any control was observed. Nonetheless your Company recognizes that any internal control framework, no matter how well designed, has inherent limitations and accordingly, regular audits and review processes ensure that such systems are re-enforced on an ongoing basis. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company.

DIVIDEND

Your Directors recommended payment of an interim equity dividend of H2/- per equity share (i.e. 200%) on face value of H 1/- per share. The cash outflow on account of equity dividend is H37,66,02,940 /-. This interim dividend shall be considered as final divided for the FY 2022-23.

TRANSFER TO GENERAL RESERVE

As permitted under the provisions of the Companies Act, 2013, the Board does not propose to transfer any amount to general reserve and has decided to retain the entire amount of profit for the Financial Year 2022-23 in the profit and loss account.

SHARE CAPITAL

The paid-up Equity Share Capital as at March 31, 2023 stood at H 18.83 crores. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants.

H250 crores worth of commercial paper were issued by the Company during the preceding financial year. Out of the aforementioned sum, H150 crores have already been redeemed during previous financial year, and the remaining balance of H100 crores have been redeemed during the year.

COPY OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, copy of the Annual Returns of the Company in form MGT-7 is placed on the website of the Company and is accessible at the web-link: https://www.dwarikesh.com

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors of the Company met five (5) times during the year on May 02, 2022; July 29, 2022; October 28, 2022; January 30, 2023 and March 20, 2023.

SUBSIDIARY COMPANYS REPORT

The Company does not have any subsidiary in terms of provisions of Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions entered during the financial year were in the ordinary course of business and at arms length basis. There were no materially significant Related Party Transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as required to be provided under Section 134(3)(h) of the Companies Act, 2013 are disclosed in Form AOC-2 as Annexure I.

The Board of Directors of the Company on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the rules thereunder and the Listing Regulations and placed at the below mentioned weblink: https://www.dwarikesh.com/pdf/2018/ Related-Party-Transactions-Policy-1.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has not made any loans or investments or given guarantees or provided securities under Section 186 of the Act during the year.

PUBLIC DEPOSITS

The Company did not have any fixed deposits at the beginning of the year nor has it accepted any deposited during the year in terms of Section 74 of the Companies Act, 2013.

MSME RETURN

MCA vide order dated 22^nd January, 2019 directed all companies, who get supplies of goods or services from micro and small enterprises and whose payments to micro and small enterprise suppliers exceed forty five days during the year. The Company is not required to file MSME Return as all payments have been done within prescribed time.

PARTICULARS OF EMPLOYEES AND RELATED INFORMATION

In terms of the provision of Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement containing the disclosures pertaining to remuneration and other details as required under the Act and the above rules are provided in Annexure II.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Changes in Directors and Key Managerial Personnel

During the year, Shri B. K. Agarwal (DIN: 00001085) resigned as an Independent Director of the Company w.e.f. October 28, 2022. The Board places on record appreciation for his valuable contribution to the growth of the Company.

B. Declaration by an Independent Director(s), ReAppointment & Meeting

Pursuant to the requirements of Section 149(7) of the Companies Act, 2013, the Company has received the declarations from all the independent directors confirming the fact that they all are meeting the eligibility criteria as stated in Section 149(6) of the Companies Act, 2013.

As required under Schedule IV to the Act(Code for Independent Directors) and Regulation 25 (3) of the hold at least 1 (one) meeting in a year, without the presence of Non-Independent Directors.

The Independent Directors met once, i.e, on Monday, January 30, 2023. The Meeting was conducted without the presence of the Chairman, Executive Directors and any other Managerial Personnel.

The Independent Directors, inter alia, discussed, and reviewed performance of Non-Independent Directors, the Board as a whole, Chairman of the Company, and assessed the quality, quantity and timeliness of flow of information between the Companies management and the Board that is necessary for the Board to perform its duties effectively and reasonably.

C. Formal Annual Evaluation

Pursuant to the requirements of Section 134(3)(p) of the Companies Act, 2013 read with Regulation 17 of the SEBI Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of its Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors were carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

D. Policy on Directors Appointment and Remuneration including criteria for determining qualifications, positive attributes, independence of a Director, Key Managerial Personnel and other employees

In line with the principles of transparency and consistency, your Company has adopted the following policies which, inter alia includes criteria for determining qualifications, positive attributes and independence of a Director.

The policy of the Company on directors appointment and remuneration, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on Companys website at https://www.dwarikesh.com/pdf/2018/Policy-on- Directors-Appointment-and Remuneration.pdf

E. Statement of Directors Responsibilities

Pursuant to the requirements under Section 134, subsection 3(c) and sub-section 5 of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, state and confirm that: As required under the provisions of Section 134(3)(c) of the Companies Act, 2013, your Directors confirm that:

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

b. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that year;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the directors had prepared the annual accounts on a going concern basis.

e. the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively,

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement), Management Discussion and Analysis Report for the year under review is presented in a separate segment which is forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

Dwarikesh has been an early adopter of CSR initiatives. The Company works primarily through CSR trust, viz R R Morarka Charitable Trust, towards supporting projects in eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environmental sustainability, disaster relief and rural development projects.

Companies CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. The brief outline of the CSR policy of the Company and the initiatives undertaken are available on our website at https://www.dwarikesh.com/pdf/2021/ Policy-on-Corporate-Social-Responsibility.pdf .

A detailed Annual Report on CSR Activities undertaken by the Company during the year as prescribed under the Companies (Corporate Social Responsibility) Amendment Rules, 2021 is annexed herewith as Annexure III.

RISK MANAGEMENT POLICY

As per Regulation 21 of the SEBI Listing Regulations, the top 1000 listed entities, determined on the basis of market capitalization has to constitute a Risk Management Committee. Risk Management Committee of the Company is responsible to review and combat the risk on periodical basis. A detailed note on Risk Management policy, elements of risk and its mitigation is comprised in Corporate Governance Report.

VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy, in compliance with the provisions of Section 177 of the Act and Regulation 22 of the Listing Regulations, so as to enable the Directors, Employees and all Stakeholders of the Company to report genuine concerns, to provide for adequate safeguards against victimization of persons who use such mechanism and make provisions for direct access to the Chairman of Audit Committee. The details of the said policy is explained in the Corporate Governance Report and has been uploaded on the website of the Company at https:// www.dwarikesh.com/pdf/2018/Whistle-Blower-Policy.pdf

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has put in place a policy on Anti Sexual harassment in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates.

No complaints have been received during the year under review.

CORPORATE GOVERNANCE

As per Regulation 34 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a report on Corporate Governance together with the Auditors Certificate regarding compliance of the conditions of corporate governance is provided under Annexure IV.

BOARD COMMITTEE

The Company has following mandatory Committees, viz,

1. Audit Committee

2. Stakeholders Relationship Committee

3. Nomination and Remuneration Committee

4. Corporate Social Responsibility Committee

5. Risk Management Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars in respect of conservation of energy, technology absorption and foreign exchange earnings & outgo are furnished in Annexure V and form a part of this report.

AUDITORS

A. STATUTORY AUDITORS & AUDITORS REPORT M/s. Mittal Gupta & Co., Chartered Accountants having Firm Reg. No. 01874C, Kanpur were appointed as the Statutory Auditors of the Company at the AGM held on June 30, 2022, to hold office until conclusion of the 33^rd AGM. As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained written confirmation from M/s. Mittal Gupta & Co., that their appointment is made in conformity with the limits specified in the said Section.

The Auditors Report for the financial year ended March, 2023 is unmodified, i.e, it does not contain any qualification, reservation, adverse remark or disclaimer. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company during the financial year under review.

B. COST AUDITORS

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and rules made thereunder, the Board on the recommendation of the Audit Committee has re-appointed M/s. Ramanath Iyer & Co, Cost Accountants (Firm Regn No. 000019), as Cost Auditors to conduct cost audits relating to sugar, electricity and industrial alcohol for the year ended March 31, 2023.

The Cost Accountants have confirmed that their appointment is within the limits of Section 141 (3) (g) of the Act and free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013.

The Cost Audit Report for the financial year March, 2022 did not contain any qualification, reservation, adverse remark or disclaimer. The Cost Audit Report for the year end March, 2023 shall be made available by Cost Auditors on or before September 30, 2023.

C. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment

and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. VKM & Associates, a Practicing Company Secretary (Certificate of Practice no. 4279), Secretarial Auditor to undertake the Secretarial Audit of the Company for the year ended March 31, 2023. The Secretarial Audit Report is appended to this Report as Annexure VI.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

SEBI, vide its circular dated May 10, 2021, made BRSR mandatory for the top 1,000 listed companies (by market capitalization) from fiscal 2023, while disclosure was voluntary for fiscal 2022 .

DSIL believes that we are accountable not merely to our shareholders from a revenue and profitability perspective but also to the larger society which is also its stakeholder. Hence, to comply with BRSR requirements in professional manner Company has appointed an external agency viz. PricewaterhouseCoopers (PWC). The BRSR disclosures form a part of Annual Report 2022-23. Report is annexed by way of Annexure VII.

ACKNOWLEDGEMENT

Your directors wish to place on record their sincere gratitude and appreciation to its members, sugar cane growers, employees, bankers, financial institutions, Central & State Government Agencies for their valuable contribution in the growth of the organization.

		On behalf of the Board of Director
	B J Maheshwari	Vijay S Banka
Place : Mumbai	Managing Director & CS cum CCO	Managing Director
Date : April 27, 2023	(DIN: 00002075)	(DIN: 00963355)